A television station broadcasts US Federal Reserve Chair Chair Jerome Powell speaking in Jackson Hole, Wyoming, on the floor of the New York Stock Exchange (NYSE) in New York on August 23, 2024. Powell said on August 23 that the "time has come" for the US to start cutting interest rates, adding that his "confidence has grown" that the battle against inflation is on track. "The time has come for policy to adjust," he said in a keynote speech at the Jackson Hole Economic Symposium in Wyoming, according to prepared remarks. (Photo : ANGELA WEISS/AFP via Getty Images)
After a global interest rate cuts, stocks from all over the world are following up with their all-time highs.
On Friday, Reuters reported that some global stocks reached their record highs. But not the same can be said to yen as it only eased as Bank of Japan did not follow other Federal Reserves and Global Banks' footsteps in rate hikes.
As a result, the Japenese currency lowered to 143.75.
On a positive note, dollar increased to 0.8% and has been steady afterward despite mounting losses earlier this week over Fed's 50 basis point rate cut. Fed has since assured traders and investors that this massive reduction will protect US economy in the long run rather than amend the volatile labor market.
Regardless, Fed Chairman Powell is carefully observing the US labor market.
At the same time, the British pound increased to $1.3300, the highest since March of 2022, after strong retail sales in August. Gold also reached new highs of $2,610.10 an ounce and oil have increased expect for Brent which is now $74.67 per barrel.
Per CNN, MSCI index of global stocks were up by 0.1% after a record high of 1.6%. This week, it will be increasing for 1.5%. Additionally, the S&P 500 were up by 0.5% but Wall Street futures was down.
However, in Europe, stocks did not break records as it fell by 0.6% from their recent highs. Due to weak performance in China, Mercedes-Benz and other car companies led the decline. This is because the country kept their rates steady, disappointing businesses expecting a cut from their lents.
Impact of Interest Rate Cuts Ahead
Currently, Reuters shared that Wall Street is still assessing Fed's interest rate cut but it is expected to provide more easing measures. Projections for another rate cut is 40%, with 50 basis points again, but settling at 2.83% until next year.
With this cut, investors are more optimistic about the US economy, especially in jobless claims. Should the healthy labor market persist, US economic growth will arrive faster.